The Best Marketing Strategy Changes With the Market

There is a question producers ask all the time:

What should I do?

Should I sell? Should I hedge? Should I buy a put? Should I use an HTA? Should I store it? Should I wait?

It would be nice if there were one answer.

There isn’t.

The right decision depends on your operation, your risk tolerance, your storage, your cash needs, the structure of the market and, importantly, what the market is giving you right now.

That last part gets overlooked.

Good marketing isn’t about deciding that you’re an “options guy” or an “elevator guy.” It’s about understanding enough of the toolbox that you can recognize when one tool gives you an advantage over another.

An Order That Never Fills Is Worth Zero

We had a great example of this come up recently with December 2027 corn.

A producer was looking at a level where he would be interested in making a sale. The conventional approach would be simple: put in an order and wait.

If the market gets there, great.

If it doesn’t, nothing happens.

Instead, he was looking at whether selling a call could accomplish something different. The idea wasn’t simply to collect premium. He had thought through what he would do if the market rallied, what he would do if it didn’t, when he might exit the option and how a cash sale could eventually fit into the strategy.

That distinction matters.

The value wasn’t necessarily in the specific trade. The value was in thinking beyond a single order.

If the market never reaches your target, could there have been another way to take advantage of time or volatility? If it does reach your target, do you know what happens next? If conditions change three months from now, can the strategy change with them?

Those are much better questions than simply asking where corn is going.

Stop Looking for the One Right Tool

There is nothing inherently wrong with using an elevator contract.

There is nothing inherently better about using futures or options.

Storage isn’t always right. Selling off the combine isn’t always wrong. Futures aren’t automatically cheaper. Options aren’t automatically safer.

The problem starts when the decision is made because that’s what you always do.

There are years when an elevator may offer exactly what you need. There are other years when carrying grain month after month can quietly become extremely expensive once storage, interest and other costs are added together.

The same applies to futures and options. Sometimes volatility makes an option expensive. Sometimes the market gives you an opportunity to collect premium. Sometimes maintaining control of a hedge may be extremely valuable.

The goal should be to understand the alternatives well enough to compare them.

What does this tool cost me? What risk am I accepting? What flexibility am I giving up? And what am I getting in return?

That is marketing.

The Contract You Choose Matters Too

Even after deciding to use futures or options, there is another decision that gets surprisingly little attention:

Which contract?

The obvious answer isn’t always the correct one.

Different commodities have different liquidity patterns. Some contract months trade heavily. Others technically exist but barely trade at all.

That can matter enormously when you need to enter or exit a position.

In this week’s conversation, we compared December corn with oats. December corn traded hundreds of thousands of contracts during the session we were looking at.

March oats had traded just 13.

Both are futures contracts.

They are absolutely not the same trading environment.

Gold has months that are actively traded and others that see significantly less activity. Hogs have contract months that behave very differently from one another. Minneapolis wheat can become thin enough that position size and timing matter considerably.

Understanding the commodity means understanding more than whether you think it is going up or down.

You need to understand how that market actually trades.

Spreads Can Tell You What the Market Is Saying

You don’t have to trade spreads to learn from them.

The relationship between contract months can help determine when to roll a hedge, which contract might make the most sense and what the market is telling you about supply, demand and storage.

The same applies between related markets.

Right now, the relationship between Minneapolis and Kansas City wheat is an example worth watching. When related wheat contracts move far enough apart, eventually the physical grain itself can become part of what pulls those relationships back toward normal.

That is a very different way of looking at the market than reading another headline about wheat.

And it can be far more useful.

Headlines Aren’t a Marketing Plan

There is more market information available today than anyone could possibly consume.

Russia. Ukraine. Iran. Interest rates. Weather. Acreage. Exports. Inflation. Energy. Crop conditions.

You could spend the entire day reading market news and still have no idea what you should do with your grain.

Worse, if you already believe corn is going higher, you can probably find someone online explaining exactly why corn is going higher.

If you believe it is going lower, you can find that person too.

More information doesn’t necessarily produce better decisions.

By the time most news reaches the headline, the market is already reacting to it anyway.

The more useful question is:

Does the market in front of me give my operation an opportunity to reduce risk, improve a sale or create more flexibility?

That brings the focus back to something you can actually control.

Better Marketing Is a Skill

Nobody becomes comfortable with these tools overnight.

And you shouldn’t.

Futures, options, cash contracts and spreads all carry different risks. Learning how they interact takes time.

But we continually see a difference when producers begin understanding why they are using a particular strategy rather than simply repeating what they have always done.

They start asking better questions.

Instead of:

Where is corn going?

The question becomes:

What opportunities does this market give me right now?

Instead of:

Should I sell?

It becomes:

What am I trying to accomplish, and which tool gives me the best chance to accomplish it?

That is a much more productive way to approach marketing.

Final Thoughts

You don't need to predict the top.

You don't need to know what the next headline will be.

And you certainly don't need to trade every market or use every strategy available.

You need enough knowledge to recognize when the market is offering something useful and enough of a plan to know what you are going to do with it.

Sometimes that will mean making a cash sale. Sometimes it will mean an HTA. Sometimes futures or options may make more sense. Sometimes the best decision will be doing nothing.

The advantage comes from having choices.

That’s what we dig into on this week’s Hedge Heads, including December 2027 corn, wheat spreads, contract liquidity and some of the less-talked-about markets we work with every day.

Listen to “Stop Trying to Predict the Market. Start Using It.” at thehedgeheads.com/podcast, or find Hedge Heads on Apple Podcasts and Spotify.

The risk of loss in trading commodity interests can be substantial. These are opinions only and not trading advice.